Ford plans to invest an extra £125m in electric vehicle parts production at its Halewood plant in a move that will make it a key part of the company’s European zero-emissions ambitions.

The factory on Merseyside will produce 420,000 electric drive units a year from 2024 under the plan, an increase from the 250,000 initially planned, Ford announced on Thursday.

The US carmaker announced the shift at Halewood from making gearboxes for petrol and diesel cars to producing the drive units, which include electric motors and power electronics, in October last year. The additional investment means Ford will spend £380m on upgrading Halewood and the van design centre in Dunton, Essex, for electric vehicles (EVs).

The initial investment decision, backed by about £30m in UK government funding, provided a significant boost for the UK industry, amid concerns that well-paid jobs in the industry could shift to other countries if firms choose to invest in EV plants elsewhere.

The Halewood site employs about 500 workers. Ford said the new investment would “secure employment”, although it is likely that the expansion of output would create extra jobs.

Ford closed its Bridgend factory, which produced petrol and diesel engines, in 2019, with the loss of 1,700 jobs, while the Japanese carmaker Honda said it planned to shut its Swindon plant in 2021. However, Vauxhall owner Stellantis last year announced it would upgrade its Ellesmere Port plant to produce electric vans, assuaging a longstanding concern over the fate of another major car plant across the River Mersey. Ford also produces diesel engines for vans in Dagenham, Essex.

Ford said last year that all the cars it sells in Europe will be electric by 2030, in line with the UK government’s plan to end the sale of pure petrol and diesel cars by 2030, and hybrids after 2035. Ford also intends to make two-thirds of commercial vehicle sales all-electric or plug-in hybrid by 2030.

The investment will mean that the Halewood plant will produce 70% of the 600,000 electric drive units for all Ford electric vehicles sold in Europe by 2026, the company said. The parts will be used in the electric versions of the Transit Custom and Tourneo Custom vans, as well as the electric version of its UK bestselling Puma crossover SUV and potentially in future cars.